When actual overhead cost exceeds the overhead applied, overhead is said to be underapplied.

Name: When actual overhead cost exceeds the overhead applied, overhead is said to be underapplied.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

When the actual overhead cost incurred is higher than the overhead applied, it indicates that the allocated overhead is less than the actual overhead cost, resulting in an underapplied overhead situation. Therefore, the given statement is true.

When Actual Overhead Cost Exceeds the Overhead Applied, Overhead Is